Although still being far from stable, the container shipping industry seems to be entering quieter waters. Freight rates are returning to their pre-corona levels, whilst charter rates are stabilising, though are still higher than three years ago. Volumes are substantially down compared to last year but are still higher than they were in 2019. The question, however, is how they will develop further? On a monthly basis, volumes are still reducing and are likely to continue reducing for the coming months.
To counter the decline, carriers are taking out capacity. Including those customaries for the Chinese New Year, many sailings, more than in the previous year, are being cancelled, or services are wrapped up altogether. New carriers who stepped in when the freight rates were sky high are withdrawing from the Far East-Europe trade, or in one case even collapsed. The Transatlantic trade is the only one where they can still earn money, at least for how long as it takes, but also there the rates will eventually go back to normal.
What does not provide a good outlook, is the planned influx of newbuilding capacity, some 2.5 million TEU in 2023 and 2.9 million TEU in 2024. To compensate for this, the shipbuilding industry is coming back to life again. Also, the introduction of the new CII regulation will likely result in a capacity reduction, as fuel inefficient ships will have to reduce their speeds, causing their transport production to go down, or will be demolished.